Proposed federal rules could hurt educational chances

08/26/2014

America's higher education system truly is the envy of the world, but it isn't without its challenges.

We've seen accelerating costs to attend college leading to increasing student debt loads. And even with more Americans attending college than ever before, our country is still experiencing a "skills gap" whereby firms are finding it harder to fill skill positions with qualified workers.

These are big problems that need our attention. Unfortunately, they're not just being ignored by the Obama administration, they're actually being made worse by the Department of Education's strange quest to dismantle "for-profit" higher education.

The latest volley comes in the form of a proposed "gainful employment" rule, a 841-page mishmash of regulations designed to give DOE the ability to prohibit for-profit schools that don't meet certain benchmarks from participating in federal student-loan programs.

The gainful employment rule is the type of classic, Orwellian doublespeak we see so often from Washington these days. The effect it would actually have is to reduce employment opportunities because it would severely restrict education opportunities for many Americans.

Make no mistake, the objective of this rule is not to help students. It's a blatant attempt to put a large swath of our higher education system out of business.

The tragedy of this rule is that those for-profit schools fill a valuable role as part of our higher-education system. There are roughly 3,500 career-focused, for-profit colleges around the country. Most offer technical degrees and predominantly serve veterans, older students seeking second careers, the poor, minorities, and other non-traditional students.

Data show earning a degree or training from these institutions can have positive effects on income. For countless Americans, this has been the ticket to getting a better job, escaping poverty, and improving quality of life.

DOE's proposed gainful employment rule would deny student-loan eligibility to any for-profit school for which graduates have an annual, average monthly student loan payment in excess of 8 percent of their annual income.

The gainful employment rule would not apply to other colleges and universities. And that's probably a good thing since few of them would be able to meet the stringent requirements. The average nonprofit, public university has a debt-to-income ratio of 12 percent. Private nonprofit universities do even worse at 16 percent.

The data show that for-profit schools outperform private non-profit universities in the debt-to-income measure, on the average, at about 13 percent — nearly identical to their public university counterparts. Additionally, these students actually have loan default rates slightly lower than those at nonprofit community colleges.

Data clearly shows DOE's gainful employment rule is arbitrary. Where it gets dangerous is that it also creates a great deal of new power for the Washington bureaucracy by giving them the power to pick and choose favored institutions. And it's the students — many of them adults who make financial decisions every day — who will suffer, robbed of the chance to improve their lives through training and education.

This rule needs to be scrapped. Not everyone can attend a traditional, four-year college. And with our economy becoming more dependent on technology and innovation, these tech-oriented schools are exactly what we need to fill a growing number of vacancies in skilled positions.

The last thing we should do is limit educational opportunities, particularly low-income Americans looking for new skills to lift themselves out of poverty.

Rep. Joanne Blyton, R-Joliet, is vice chairwoman of the Montana House Education Committee.